Category: Manufacturing

Supply Chain News: What US Metro Regions are Driving the Most Job Growth from Manufacturing?

Rust Belt Cities Lead the Charge, while New York City, Chicago and Los Angeles See Manufacturing Job Losses

June 20, 2017

SCDigest Editorial Staff

As SCDigest has noted for some time, US manufacturing is a mixed bag right now.

For example, the monthly manufacturing output index from the Federal Reserve came in at a level of 103.3 in May. That means manufacturing output in the month was just 3.3% above the average in the baseline year of 2012, indicating annual growth of well less than 1% since then.

Supply Chain Digest Says...

In 1950, NYC had nearly a million manufacturing workers - now there are just 74,100 after 4.7% shrinkage in 2016.

What do you say?

It's a glass half full/half empty situation when it comes to manufacturing jobs as well. But before we get to that, it's important to note how the Bureau of Labor Statistics defines a "manufacturing worker." Someone is considered to work in manufacturing if the facility where they perform their work is classified as a factory.

So that means all white collar employees - from the plant manager to the cost accountant - are considered manufacturing employees if they come to work at a plant, as of course are shop floor employees, maintenance personnel, supervisors, etc.

That said, the vast majority of manufacturing employees are blue collar, and the overall number is surely indicative of trends in shop floor employment, which is in fact tracked as a separate number by the BLS, though it is rarely cited in media reports.

As shown in the chart below, manufacturing employment has been ticking up a bit in recent years, to about 12.4 million. The good news is that is up almost a million jobs from the recent trough in December 2009, about six months since the bottom of the recession, when manufacturing employment fell to 11.46 million.

But the current figure is down sharply from the 17.2 million manufacturing jobs the US had in October 2000, a point at which the job levels really started to fall - perhaps not coincidentally right about the time when China was admitted into the World Trade Organization. And the current number is only about 64% of the peak in US manufacturing jobs, the 19.5 million in July of 1979.

US Manufacturing Employment is Inching Higher but Well Below Previous Highs

All told, the share of manufacturing jobs has shrunken from 10.5% of all non-farm employment in 2005 to about 8.5% today,

With that backdrop, writer Joel Kotkin had an interesting piece laast week on the Forbes.com website that identified the metro regions in the country that are producing the most growth in manufacturing employment.

To determine that ranking, Kotkin and a colleague looked at manufacturing employment over time, assessing short-, medium- and long-term trends going back to 2005 and adding in variables for what they viewed as "persistence and momentum." The results of those trends, based on three-month averages, were then normalized and each metropolitan statistical area (MSA) was assigned a score based on its relative position in each measure.

Red States and the Rust Belt Dominate List

Kotkin found nine of this year's top 10 regions for manufacturing job growth are in red states, led by top-ranked Louisville-Jefferson County, which straddles the border between Kentucky and Indiana. Since 2011, manufacturing employment there has expanded a whopping 30.2% to a total of 83,300 jobs.

"Taken together the latter two Michigan metro areas are now home to over 245,000 manufacturing jobs, up dramatically from the 205,500 manufacturing jobs they accounted for in 2011 and just below the 252,300 jobs they tallied a decade ago, before the Great Recession hit," Kotkin notes.

Among the other "red state" winners are Florida's West Palm Beach-Boca Raton-Delray Beach region, where the industrial job count has grown 27.67% since 2011. Also from the sunshine state is the Orlando-Kissimmee-Sanford, which perhaps surprisingly came in at number 8, driven by growth in the aerospace sector.

In ninth place was the Salt Lake City, UT area.

Kotkin says only one region outside the red states made it to the top 10: seventh-place Albany-Schenectady, NY. In a state and region that has been losing industrial jobs since the late 1960s, Albany has bucked the trend with a 17.6% gain in manufacturing workers from 2011 to 2016 to 25,800 positions.

Meanwhile the industrial workforce in New York City continues to contract. In 1950, NYC had nearly a million manufacturing workers - now there are just 74,100 after 4.7% shrinkage in 2016. New York ranked next to last among the 70 largest metro areas in the US, Kotkin says.

The other two largest US cities also did not fare well in the analysis.

The Chicago-Arlington-Naperville region ranked 56th, with 1.85% of its manufacturing jobs lost since 2011, continuing decades of decline, with manufacturing jobs in the region falling from just under a million jobs in 1966 to 520,000 in 1990, 465,000 in 2000 and 281,000 currently.

Even worse is the performance of Los Angeles-Glendale-Long Beach, which while still home to the most manufacturing jobs of any region, about 356,000, it has lost 3.47% of those jobs since 2011, and 2.1% in 2016.

So there you have it - as usual with US manufacturing these days, a mix of good news and bad.

Any reaction to this list of the fastest growing regions for manufacturing jobs? Let us know your thoughts at the Feedback section below.

Your Comments/Feedback

Sam

Demand Planner, Company

Posted on: Jun, 21 2017

Interesting to note that of the areas in red states you noted, the actual metro areas gaining the jobs tended to vote blue. Jefferson county in KY voted Democratic in the Presidential, Senate and House races there (though the less-populous Louisville county in IN voted red.) Both the Orlando and Miami metro areas voted Democrat in the three federal races. SLC was the only metro area of those listed in red states that voted conservative in all races (I'm counting the Trump/McMullin votes as a combined conservative vote, which when combined beat Clinton.)